Capital-goods eligibility under the Status Holder Incentive...

Capital-goods eligibility under the Status Holder Incentive Scrip exemption was considered broad enough to cover accessories used directly or indirectly for manufacturing, including replacement, modernisation, technological upgradation and expansion. Gaskets, bushings, bearings, gear reducers, springs, bottom parts and shock absorbers imported for plant modernisation were treated as capital goods under Notification No. 104/2009-Cus. The reported CESTAT reasoning states that the 10% restriction applies only to components, spares and parts of capital goods imported earlier, not to capital goods or accessories imported for a new plant or modernisation. Accordingly, the exemption was correctly availed and the duty demand, interest and penalty were set aside.